It’s a big week for US markets, Bitcoin and crypto as CPI inflation data, consumer sentiment, and national job data are due to be released from March 11.
As the S&P 500 shows weakness, traditional financial traders are shorting with strength as recent puts volume reaches its highest on record.
With everybody shorting, all it takes is one whiff of good news for a reversal to be triggered, but what can we expect from the Federal Reserve and how will it affect Bitcoin?
CPI inflation to determine if crypto and TradFi markets sing further or surge on good news
Inflation data is due this week and traditional market participants seem to be expecting the worst as puts volume reaches its highest in recent history.
Due on March 11 are Jolts Job openings followed by CPI inflation data on March 12, PPI inflation data for March 13, Jobless claims a day after and ending the week with consumer sentiment data.
For many investors, CPI inflation data will determine which direction the traditional markets will go. If CPI is high enough, analysts predict the S&P 500 (SPX) and the wider stock market to tumble.
Low or balanced CPI inflation data may contribute to a strong surge in prices, or a good bounce fo some sort on the S&P which would spill over onto Bitcoin and the cryptocurrency markets.
Some reports suggest inflation will be lower than expected, especially after Jerome Powell recently paused new rate cuts after the FED’s meeting in January, 2025.
Despite this, BlackRock’s Larry Fink said in a recent interview with Reuters that he expects inflation to rise as Trump’s “nationalistic” policies push the economy over the edge.
“I think if we all are becoming a little more nationalistic – and I’m not saying that’s a bad thing, you know, it does resonate with me – that it’s going to have elevated inflation,” he said.
Larry Fink also pointed out concerns with Trump’s tariff policies and how tariffs on Canada, Mexico and China are affecting international trade, which in turn, will affect the US economy and markets.
How are Trump’s policies affecting Bitcoin and crypto markets?
Last week, Trump announced that $100 billion would be invested into the US from Taiwan’s TSMC, a semiconductor manufacturing firm.
The investment is part of Trump’s plan to increase US manufacturing, challenging overseas markets, although Taiwan’s government recently said that the deal would not bring Taiwan’s most advanced tech into the US.
With such a deal, President Trump promised new jobs and a boost to the US’s manufacturing, but the deal seemed to have not been enough to calm traditional investors as the S&P fell shortly after the announcement.
Macroeconomic factors have been the largest contributor to Bitcoin and the cryptocurrency market’s performance over the past two months. Over the last 2 weeks, Bitcoin ETFs have shed over $4 billion in outflows.
Whether inflation data is positive or not, Bitcoin will soon find a bottom but the speed at which it does so may depend on data released this week. Traders ask if the crypto bull run is over, frankly, the crypto market is in a better position than many would believe.
